The IRS released the following 2012 cost of living adjustments (COLAs) pertaining to these benefits:

Qualified Transportation Fringe Benefits: For 2012, the monthly limit on the amount to be excluded from an employee's income for qualified parking benefits will be $240, a $10 increase from the 2011 limit. However, the temporary increase in the combined monthly limit for transit passes and commuter highway vehicle expenses that was in effect for 2011 has expired. Unless the increase is reinstated, the combined monthly limit for transit passes and commuter highway vehicle expenses reverts to $125 in 2012.

Dependent Care Assistance Plan (DCAPs): The $5,000/$2,500 DCAP limit remains unchanged as it is a non-indexed limit.

This month, the Departments of Labor and HHS proposed rules for the "uniform summary of coverage" that is required under PPACA. Heath insurers and group health plans (including grandfathered plans) must provide consumers with clear, consistent and comparable information about their health plan benefits and coverage beginning in 2012. Specifically, the proposed regulations provide rules implementing PPACA provisions that would ensure consumers have access to two forms that will help them understand and evaluate their health insurance choices.

These forms include:

• A Summary of Benefits and Coverage
• A uniform glossary of terms commonly used in health insurance coverage

Summary of Benefits and Coverage

The summary document will include the key features of the plan or coverage such as the covered benefits, cost-sharing provisions, and coverage limitations and exceptions. Consumers will receive the summary when shopping for coverage, enrolling in coverage at each new plan year, and within seven days of requesting a copy from a health insurance issuer or group health plan.

The Summary of Benefits and Coverage will also include a new, standardized health plan comparison tool called "Coverage Examples" that illustrate what proportion of care expenses a health insurance policy or plan would cover under common benefits scenarios. The Center for Consumer Information and Insurance Oversight (CCIIO) will provide standards for plans and issuers to simulate claims processing for each scenario so consumers can see an illustration of the coverage they get for their premium dollars under a plan.

Uniform Glossary of Terms

Under the proposed regulations, insurance terms will be the same across all plans. Insurance companies and group health plans will be required to make available a uniform glossary of terms used in health insurance coverage, for example "deductible" and "co-pay." This will allow an easier comparison of insurance plans, and the Departments of HHS and Labor will post the glossary on both www.HealthCare.gov and www.dol.gov/ebsa/healthreform/.

Click here to read the proposed regulations.

Click here to read the Model Summary of Coverage.

Click here to read the fact sheet.

The DOL is reviewing the use of electronic media to help determine whether and possibly how to expand or modify the current rules regarding the electronic distribution of employee benefit plan information. Plan information, such as quarterly account statements, is required to be disclosed under the Employee Retirement Income Security Act, which is enforced by the department’s Employee Benefits Security Administration. Comments were to be submitted on or before June 6, 2011.

For more information, click here.

The IRS has revised the optional standard mileage rates for operating an automobile for business, medical or moving expenses, resulting from the recent increases in gas prices.

Effective July 1, 2011, the new rates will increase by 4.5 cents to 55.5 cents per mile for business expenses, and 23.5 cents for automobile use related to medical or moving purposes. Charitable contribution related mileage remains fixed at 14 cents.

Click here to read Announcement 2011-40.

The DOL, HHS and IRS have jointly issued amendments to the interim final regulations on internal claims and appeals requirements and external review procedures. Among other things, these regulations offer a transition period to allow time for issuers and plans to make a reasonable transition to implement external review processes. Specifically, under an amendment to the July 2010 regulations being published contemporaneously with this technical guidance, the transition period is modified to extend through Dec. 31, 2011. HHS intends to issue determinations regarding state external review implementation no later than July 31, 2011. The agencies have also issued revised model notices as part of the new technical release guidance on state and federal external review procedures.

Click here to read Technical Release 2011-02.

In 2011, PPACA will prohibit insured group health plans from discriminating in favor of highly compensated individuals regarding eligibility and benefits. These rules are already in place for self-insured plans.

The PPACA penalties imposed for failure to comply with nondiscrimination rules related to insured health plans are different than the penalties related to noncompliance with the rules related to self-funded health plans. If an insured group health plan fails to comply with the nondiscrimination rules, the employer/plan sponsor is subject to a penalty of $100 per day for each participant not receiving the discriminatory benefit, whereas under the self-funded plan rules highly compensated individuals in a discriminatory self-funded plan are taxed on medical expenses actually paid.

In December, the IRS delayed the effective date for compliance and enforcement of this provision of PPACA until the definition of discriminatory benefits in a group health plan can be clarified, and additional regulations or administrative guidance is released.

Click here to read Notice 2011-1.

The IRS has concluded that breast pumps and lactation supplies will qualify as medical care expenses under Code Section 213(d) because they are for the purpose of affecting a structure or function of the lactating woman’s body. Therefore, these items will qualify for tax-free reimbursement from a health FSA or HRA, or for a tax-free distribution from an HSA. The IRS will revise Publication 502 to include this new information.

Click here to read IRS Announcement 2011-14.